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Auto alternatives for the 21st centuryFri, 09 Dec 2016 14:15:34 +0000en-UShourly1http://wordpress.org/?v=4.2.4Are EVs Too Expensive For Most Americans?http://www.hybridcars.com/are-evs-too-expensive-for-most-americans/
http://www.hybridcars.com/are-evs-too-expensive-for-most-americans/#commentsMon, 02 Dec 2013 23:43:44 +0000http://www.hybridcars.com/?p=98489Stories now spinning off from findings of a just-released Navigant Electric Vehicle Consumer Survey indicate hopefulness for alternative vehicles, but the picture is less than ideal. Points making top news include that 71 percent of a cross-sampling of 1,084 Americans would spend less than $25,000 on their next vehicle, and 43 percent would spend no […]

]]>Stories now spinning off from findings of a just-released Navigant Electric Vehicle Consumer Survey indicate hopefulness for alternative vehicles, but the picture is less than ideal.

Points making top news include that 71 percent of a cross-sampling of 1,084 Americans would spend less than $25,000 on their next vehicle, and 43 percent would spend no more than $20,000.

Splashed across headlines were derivations of the notion that buyers think more than $25,000 is excessive for an electric car.

Oh well. So much for EVs and PHEVs that cost upwards of $30,000, right? Or maybe after subsidies, some cars on the edge might make the grade assuming budget-conscious shoppers fully qualify?

News Value?

Presently plug-in vehicles comprise less than 1 percent of the U.S. market, so it’s not even news that people are stand-offish for various reasons, but what do we make of headlines shouting they cost too much?

Of its sources and methodology for its fall 2013 online survey, Navigant says it was “a nationally representative and demographically balanced sample” and, “Respondents were offered a chance to win prizes in exchange for their participation. The margin of error for these survey results is +/- 3% with a 95% confidence interval.”

Of respondents, “81% of survey participants reported they either own or lease a vehicle.” However, unlike other surveys in which shoppers were pre-qualified actively searching for a car, this was a general survey of Americans in the main.

Respondents thus included 7 percent of “consumers” stating they don’t own a vehicle, but do borrow or rent cars. Another 12% said they do not drive on a regular basis.

Undoubtedly some in-the-market shoppers would agree they want to pay less, but is it safe to say that people who aren’t in the market, or don’t own cars, or don’t regularly drive could affect the results of a car shopping survey?

If they express expectations about price, to what degree would they be unreasonable? If $25,000 is too high to some respondents, might they also say many gas and diesel cars also cost too much, given the average new car price is hovering around $31,000?

Among respondents, nearly 30 percent wanted public charging for a nominal cost and almost one-quarter said they wanted public charging for free.

Perhaps they’d also say they want gas for a buck a gallon or free also?

Navigant Research is normally a fine resource, describing itself as “not beholden to any special interests,” and its research and surveys, including this one, do provide value, but like many surveys, it must be understood this is but one snapshot of a random sampling of people.

Balance

Put in benign terms, human beings are emotionally and intellectually variable. Information perceived by them and what they feel does shift.

The respondents said they were “most familiar with the Chevrolet Volt (44%) and the Nissan LEAF (31%). Familiarity with the Tesla Model S, Ford C-Max Energi, and the BMW i3 is below 25% for each.”

In short, they did not know a whole lot about the subject, but offered their views anyway.

For its part, Navigant came away expressing a relatively positive picture of the U.S. EV market.

Commenting on the 71 percent including non-car-owners who said they would spend $25,000 or less, Navigant Principal Research Analyst Dave Hurst observed answers by car owners were only several percentage points lower – but the price point for buyers to give the green-light to EVs was only a little over $25,000.

Hurst’s comment was a reference to answers to the following survey questions:.

“Assuming the other features were right, how interested would you be in purchasing a BEV [battery electric vehicle] with the following characteristics?

• » Electricity cost equivalent of $0.75 per gallon

• » Driving range of 100 miles on a single charge

• » You could plug in the vehicle to charge at your home each night

• » Additional charging stations may be available around town

• » A price of $26,000 after any purchase incentives”

The results: “Nearly 40% of respondents said they would be extremely interested or very interested in such a vehicle, while a quarter said they would not be very interested or not at all interested in a BEV as described.”

The above question practically describes a Nissan Leaf but was not featured in the first couple paragraphs of stories about how EVs are too expensive.

The 40-percent answer is however noteworthy. If even 4 percent of Americans put their money where their cursors clicked, and went beyond “extremely interested or very interested” to actually buy a car so described, it would constitute a paradigm shift in the U.S. market.

“Assuming the other vehicle features were right, how interested would you be in purchasing a PHEV with the following characteristics?

• » Electricity cost equivalent of $0.75 per gallon

• » Driving range of 25 to 35 miles on a single charge, then the gasoline engine

provides additional 300 miles of range with fuel economy of 35 miles per gallon

• » You could plug in the vehicle to charge at your home each night

• » Additional charging stations may be available around town

• » A price of $28,000 after any purchase incentives”

Navigant’s white paper says: “In this scenario, less than one-third of respondents (30%) were extremely interested or very interested in purchasing a PHEV, and 32% were either not very interested or not at all interested.”

Here too, if only 3 percent of Americans went past being “extremely interested or very interested” and bought, it would mean the Volt was crushing Toyota Prius sales month after month.

One of the survey’s other findings was: “Even under several different scenarios, interest in BEVs and PHEVs remains below 50%, indicating that consumers like the idea of EVs, but may not be won over by their features and price points.”

Again, if half of Americans put words into action, how would things look? Or alternately, if only half of Americans are interested in EVs and PHEVs, should automakers quit or back off?

Tesla Model S in background: And two Americans that don’t fit the profile.

Is Tesla nuts trying to sell cars for three-times the $25,000 threshold?

Are other automakers much smarter for holding back limited electrified offerings or not even bothering to offer them at all?

Statistics

How one spins the data – and quality of said data – can be as variable as anything else, including the mood of less-than-well-informed anonymous respondents answering a Web survey about advanced-tech cars in exchange for a prize.

Factors affecting American consumers have been known to be like the weather; today it may be stormy, but tomorrow the sun may be shining and the sky blue.

It could also be the survey is presciently accurate. Do you think this is likely? Or, could the picture be even worse than portrayed?

More certain is many variables are in play to determine success or failure for plug-in vehicles, some of which were not accounted for by the snapshot of the respondents’ subjective sensibilities.

How it all plays out is a drama unfolding. It would be premature to say “and they all lived happily ever after,” but it is far too soon to fret overly much about a snapshot in time.